U.S. companies are pulling future borrowing into the present, racing to refinance debt while credit remains cheap.

Why it matters: Refinancing looks attractive when the future is uncertain. This could be a signal that corporate borrowers see a volatile future ahead.

What they're saying: "Corporate bonds aren't scarce anymore — and now expectations are high," the credit strategy team at BNP Paribas wrote in a note, lowering its credit outlook to neutral from bullish.

• Credit spreads — the extra yield investors demand over U.S. Treasuries — are near their tightest levels since the 1990s.
• Investors think that owning corporate debt is really safe, so much so that they're not requiring much more yield to own that debt compared with a government bond yield, which carries a near guaranteed return.

State of play: Credit is priced for perfection, just as risks to corporate debt are mounting. Firms are refinancing at the highest rate since 2020, according to Dealogic.

• At the same time, corporate bond issuance is set to rise in 2026, especially as AI companies issue debt to fund their ambitions, reducing the scarcity that helped keep credit spreads calm in recent years.

Follow the money: What could a shaky corporate credit market mean for normal people?

• Borrowing may get more expensive. If credit tightens, companies that wait could face higher costs, often passed on through prices or slower hiring.
• The markets could swing harder. Tight spreads leave little margin for bad news, raising the risk of sharper moves that hit retirement accounts.
• It serves as an early warning. When companies refinance early, it often signals that they see trouble ahead.

By the numbers: The supply of investment grade debt is expected to hit $1.8 trillion in 2026, an 8% increase from a year earlier, according to BNP. And AI hyperscalers are expected to issue $250 billion of that total, a 106% increase.

• "These tech companies can quite literally afford to issue more debt and refinance because of their strong balance sheets," Brij Khurana, portfolio manager at Wellington Management, tells Axios.

The bottom line: Companies are locking in certainty now, betting that these unusually friendly credit conditions may not survive a bumpier road ahead.

Google is rolling out an updated "Mayors AI Playbook" in partnership with the U.S. Conference of Mayors at the group's winter meeting in Washington today, the company first told Axios.

Why it matters: Cities are spending more on technology, but many lack the expertise to deploy AI safely and at scale. Whoever helps them cross that gap could lock in years of government contracts.

The big picture: The first AI playbook for mayors was about awareness. Now, it's about action: a blueprint for implementing AI strategies at the local level.

Between the lines: This isn't benevolence. It's customer acquisition.

• Mayors don't simply buy "AI." They buy cloud services, data modernization, cybersecurity and support, the tech stack beneath any serious deployment.
• In return, cities get access to tools that could fix longstanding challenges, Cris Turner, vice president of government affairs at Google, told Axios last June when it first released its playbook.

State of play: The Mayors AI Playbook is designed to help city leaders scale AI-driven solutions and programs through two parts.

• How to build an "AI-ready city" through governance, procurement, staffing and the basics needed to roll out tools safely and effectively.
• How to use "AI in action" to carry out city services like multilingual resident communications, call center modernization, document review and research.

Threat level: Google's competitors want their tech to run cities too.

• Some 30,000 San Francisco city workers use Copilot powered by ChatGPT.
• Anthropic is building out a public sector team and offers partners across all branches of government access to Claude for $1.
• Google, OpenAI and Anthropic are all government-approved AI vendors, which could simplify adoption for local entities.

Reality check: Demand is there, however, execution lags.

• Almost half of 650 local government officials surveyed said AI use is a low priority, per a 2024 study from the International City/County Management Association. 77% said the main barrier to adoption was a lack of awareness and understanding.
• Any AI skills gap among local officials could lead to tech disparities across cities, with those whose leaders embrace AI potentially getting a head start.

The bottom line: Google and its rivals stand to profit as cities adopt AI.

The $5.2 billion Capitol One acquisition of corporate card startup Brex is the largest bank acquisition of a fintech startup yet, according to an analysis of data from PitchBook, S&P Global and LSEG.

Why it matters: Despite their size, banks aren't the main fintech acquirers.

Driving the news: Just 1% of fintech acquisitions from 2013 to 2023 were made by banks, per Oliver Wyman. And 87% of those deals were under $300 million.

Behind the scenes: Failed big-ticket buys in the past have discouraged banks and other financial institutions from trying larger deals.

• UBS and Wealthfront called off a $1.4 billion deal in 2022, with regulatory concerns the primary issue, and the Justice Department's scuttling of Visa's acquisition of Plaid has loomed as a shadow over fintech M&A talks.
• Notable bank buys of U.S.-based fintechs have included JPMorgan's $400 million bet on WePay and its ill-fated $175 million purchase of Frank.

Follow the money: Fintechs that emerged during the pandemic are also seeing demands for liquidity from investors, even at lower prices, making them more attractive to banks.

What they're saying: The Brex acquisition is "a landmark deal in terms of both size and ambition," Jason Zaler, founder of Presidio Strategies, tells Axios Pro.

• "With less regulatory scrutiny, it opens the doors to dealmaking."

Reality check: It's a widening of the door, not an opening of the floodgates.

• Banks are commonly valued at price-to-book ratio, and asset-light fintechs tend to dilute that figure and lead to a dip in stock price when acquisitions are announced.

The bottom line: The banks are getting bolder, for the right price.

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